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EXHIBIT 1.1
[ ] SHARES
USEC INC.
COMMON STOCK, $0.10 PAR VALUE
UNDERWRITING AGREEMENT
, 1998
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, 1998
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ &
▇▇▇▇▇ Incorporated
▇.▇. ▇▇▇▇ & Company
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc.
▇▇▇▇▇▇ Brothers Inc.
Prudential Securities Incorporated
▇▇▇▇▇ ▇▇▇▇▇▇ Inc
c/o Morgan ▇▇▇▇▇▇▇ & Co.
Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
International Limited
▇▇▇▇▇▇▇ ▇▇▇▇▇ International
▇.▇. ▇▇▇▇ & Company
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc.
▇▇▇▇▇▇ Brothers Inc.
Prudential Securities Incorporated
▇▇▇▇▇ ▇▇▇▇▇▇ Inc
▇/▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇▇▇▇▇▇▇ Limited
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
England
Dear Sirs and Mesdames:
The United States government, as represented by the Secretary
of the Treasury (the "Selling Shareholder"), proposes to sell to the several
Underwriters (as
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defined below), an aggregate of ___ shares of the common stock of United States
Enrichment Corporation, a Delaware corporation ("USEC Delaware"), $0.10 par
value (the "USEC Shares"), constituting all outstanding shares of capital stock
of USEC Delaware.
USEC Delaware is a recently organized Delaware corporation and
a wholly-owned subsidiary of the United States Enrichment Corporation, a
federally-chartered entity ("USEC Federal"). USEC Inc. (the "Company") is a
wholly-owned subsidiary of USEC Delaware, and is the parent to two subsidiary
Delaware corporations. USEC Federal, USEC Delaware and the Company are
collectively referred to as the "USEC Companies." On the Closing Date (as
defined herein), USEC Delaware will succeed by merger (the "USEC Merger") to
all of the business and operations of USEC Federal pursuant to the terms and
conditions of the merger agreement dated as of _______, 1998 between USEC
Delaware and USEC Federal (the "USEC Merger Agreement"). The USEC Merger will
occur immediately prior to the closing of the sale of the USEC Shares to the
Underwriters. Upon consummation of the USEC Merger, each outstanding share of
common stock of USEC Federal will be converted into ___ shares of the common
stock of USEC Delaware such that there will be outstanding an aggregate of ____
USEC Shares immediately following the USEC Merger. Immediately following the
sale of the USEC Shares to the Underwriters pursuant to this Agreement, USEC
Delaware will merge with a subsidiary of the Company (the "Company Merger")
pursuant to the terms and conditions of the merger agreement dated as of _____,
1998 between USEC Delaware, the Company and a wholly-owned subsidiary of the
Company (the "Company Merger Agreement"), and in the Company Merger the USEC
Shares will be converted into shares of common stock of the Company, $0.10 par
value ( the "Company Shares"). As a result of the Company Merger, USEC Delaware
will become a wholly-owned subsidiary of the Company. The USEC Merger and the
Company Merger are collectively referred to as the "Mergers," and the USEC
Merger Agreement and the Company Merger Agreement are collectively referred to
as the "Merger Agreements." For purposes of this Agreement, including any
opinions of counsel delivered pursuant hereto, the Mergers shall be deemed to
occur simultaneously.
It is understood that, subject to the conditions hereinafter
stated, ____________ USEC Shares (the "U.S. USEC Shares") will be sold to the
several U.S. Underwriters named in Schedule I hereto (the "U.S. Underwriters")
in connection with the offering and sale of the same number of Company Shares
in the United States to United States Persons (as such terms are defined in the
Agreement Between U.S. and International Underwriters of even date herewith),
and ____________
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USEC Shares (the "International USEC Shares") will be sold to the several
International Underwriters named in Schedule II hereto (the "International
Underwriters") in connection with the offering and sale of the same number of
Company Shares outside the United States to persons other than United States
Persons. The U.S. USEC Shares and the International USEC Shares, in the
aggregate, constitute all outstanding shares of capital stock of USEC Delaware.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated, ▇.▇. ▇▇▇▇ & Company, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc., ▇▇▇▇▇▇ Brothers
Inc., Prudential Securities Incorporated and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc shall act
as representatives (the "U.S. Representatives") of the several U.S.
Underwriters, and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International Limited, ▇▇▇▇▇▇▇ ▇▇▇▇▇
International, ▇.▇. ▇▇▇▇ & Company, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc., ▇▇▇▇▇▇
Brothers Inc., Prudential Securities Incorporated and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc
shall act as representatives (the "International Representatives") of the
several International Underwriters. The U.S. Underwriters and the International
Underwriters are hereinafter collectively referred to as the Underwriters.
The Company proposes to sell to the several U.S. Underwriters,
not more than an aggregate of__________ additional shares of the common stock of
the Company, $0.10 par value (the "Additional Shares"), if and to the extent
that the U.S. Representatives shall have determined to exercise, on behalf of
the U.S. Underwriters, the right to purchase such shares of common stock
granted to the U.S. Underwriters in Section 2 hereof. The Company Shares and
the Additional Shares are hereinafter collectively referred to as the "Shares".
The shares of common stock of the Company, $0.l0 par value, to be outstanding
after giving effect to the sales contemplated hereby are hereinafter referred to
as the "Common Stock".
The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement relating to the Shares.
The registration statement contains two prospectuses to be used in connection
with the offering and sale of the Shares: the U.S. prospectus, to be used in
connection with the offering and sale of Shares in the United States to United
States Persons, and the international prospectus, to be used in connection with
the offering and sale of Shares to persons other than United States Persons. The
international prospectus is identical to the U.S. prospectus except for the
outside front cover page. The registration statement as amended at the time it
becomes effective, including the information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A under
the Securities Act of 1933, as amended (the "Securities Act"), is hereinafter
referred to as the "Registration Statement"; the U.S. prospectus
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and the international prospectus in the respective forms first used to confirm
sales of Shares are hereinafter collectively referred to as the "Prospectus". If
the Company has filed an abbreviated registration statement to register
additional shares of Common Stock pursuant to Rule 462(b) under the Securities
Act (the "Rule 462 Registration Statement"), then any reference herein to the
term "Registration Statement" shall be deemed to include such Rule 462
Registration Statement.
1. REPRESENTATIONS AND WARRANTIES OF THE USEC COMPANIES. The USEC
Companies jointly and severally represent and warrant to and agree with each of
the Underwriters that:
(a) The Registration Statement has become effective; no stop
order suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or
threatened by the Commission.
(b) (i) The Registration Statement, when it became effective,
did not contain and, as amended or supplemented, if applicable, will
not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) the Registration Statement and
the Prospectus comply and, as amended or supplemented, if applicable,
will comply in all material respects with the Securities Act and the
applicable rules and regulations of the Commission thereunder and
(iii) the Prospectus does not contain and, as amended or supplemented,
if applicable, will not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, except that the representations and warranties set
forth in this paragraph do not apply to statements or omissions in the
Registration Statement or the Prospectus based upon information
relating to any Underwriter furnished to any of the USEC Companies in
writing by such Underwriter through you expressly for use therein.
(c) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the state
of Delaware, has, and after giving effect to the Mergers will have, the
corporate power and authority to own its property and to conduct its
business as described in the Prospectus and is, and after giving effect
to the Mergers will be, duly qualified to transact business and is,
and after giving effect to the Mergers will be,
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in good standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified
or be in good standing would not have a material adverse effect on the
Company after giving effect to the Mergers.
(d) USEC Delaware has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the state
of Delaware, has, and after giving effect to the Mergers will have, the
corporate power and authority to own its property and to conduct its
business as described in the Prospectus and is, and after giving effect
to the Mergers will be, duly qualified to transact business and is,
and after giving effect to the Mergers will be, in good standing in
each jurisdiction in which the conduct of its business or its ownership
or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would
not have a material adverse effect on USEC Delaware after giving effect
to the Mergers.
(e) USEC Federal is a federally-chartered entity, is validly
existing as a federally-chartered entity, and has the power and
authority to own its property and to conduct its business as described
in the Prospectus. USEC Federal is not qualified or licensed as a
foreign corporation under the corporate laws of any of the ▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇.
(f) This Agreement has been duly authorized, executed and
delivered by the USEC Companies and is a valid and binding agreement of
the Company, USEC Delaware and, subject to the USEC Privatization Act,
Chapter 1, Title 3 of Public Law 104-134, and the Energy Policy Act of
1992, Public Law 102-486 (collectively, the "Privatization
Legislation"), USEC Federal. The USEC Merger Agreement has been duly
authorized, executed and delivered by USEC Delaware and USEC Federal
and is a valid and binding agreement of USEC Delaware and, subject to
the Privatization Legislation, USEC Federal. The Company Merger
Agreement has been duly authorized, executed and delivered by USEC
Delaware and the Company and is a valid and binding agreement of USEC
Delaware and the Company.
(g) The authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus.
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(h) The outstanding shares of common stock of USEC Federal
have been duly authorized and are validly issued, fully paid and
non-assessable. After giving effect to the Mergers, the outstanding
shares of common stock of each of USEC Delaware and the Company will
have been duly authorized and validly issued, fully paid and
non-assessable.
(i) The Additional Shares have been duly authorized and, when
issued and delivered in accordance with the terms of this Agreement,
will be validly issued, fully paid and non-assessable, and the issuance
of such Additional Shares will not be subject to any preemptive or
similar rights.
(j) The execution and delivery by the USEC Companies of, and
the performance by the USEC Companies of their respective obligations
under, this Agreement, the USEC Merger Agreement with respect to USEC
Federal and USEC Delaware, and the Company Merger Agreement with
respect to USEC Delaware and the Company, will not contravene any
provision of applicable law or the charters or by-laws of the USEC
Companies or any agreement or other instrument binding upon any of the
USEC Companies that is material to any of the USEC Companies, or any
judgment, order or decree of any governmental body, agency or court
having jurisdiction over any of the USEC Companies, and, except as
described in the Prospectus, no material consent, approval,
authorization or order of, or qualification with, any governmental body
or agency is required for the performance by any of the USEC Companies
of their respective obligations under this Agreement and the Merger
Agreements, except such as may be required by the securities or Blue
Sky laws of the various states in connection with the offer and sale of
the Shares.
(k) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the USEC Companies from that set forth in the Prospectus
(exclusive of any amendments or supplements thereto subsequent to the
date of this Agreement).
(l) There are no material legal or governmental proceedings
pending or, to the knowledge of the USEC Companies, threatened to which
any of the USEC Companies is, or the Company or USEC Delaware will be,
after giving effect to the Mergers, a party, or of which the USEC
Companies'
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property is, or the Company's or USEC Delaware's property will be,
after giving effect to the Mergers, the subject, that are required to
be described in the Registration Statement or the Prospectus and are
not so described or any statutes, regulations, contracts or other
documents that are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not so described or filed as required.
(m) USEC Federal has complied in all material respects with
all of its duties under the Privatization Legislation required to be
performed or complied with at the date hereof insofar as such duties
relate to the transactions contemplated by this Agreement. Except as
described in the Prospectus, USEC Federal has and the Company and USEC
Delaware will have, after giving effect to the Mergers, all necessary
consents, authorizations, approvals, clearances, orders, certificates
and permits of and from, and USEC Federal has made and the Company and
USEC Delaware will have made, after giving effect to the Mergers, all
declarations and filings with, all federal, state, local and other
governmental authorities (including, without limitation, the Nuclear
Regulatory Commission and the Occupational Safety and Health
Administration), all self-regulatory organizations and all courts and
other tribunals, to own, lease, license and use their respective
properties and assets and to conduct their respective businesses in the
manner described in the Prospectus, except to the extent that the
failure to obtain or file would not have a material adverse effect on
the Company or USEC Delaware after giving effect to the Mergers.
(n) Except as described in the Prospectus, USEC Federal owns
or has the right to use, and as of the Closing Date and after giving
effect to the Mergers, the Company or USEC Delaware will own or have
the right to use, all material patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks and trade names
currently employed by it in connection with the business now operated
by USEC Federal, and except as described in the Prospectus, none of the
USEC Companies has received any notice of infringement of or conflict
with asserted rights of others with respect to any of the foregoing
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a material adverse effect on
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USEC Federal's business as now operated by USEC Federal or, after
giving effect to the Mergers, the Company or USEC Delaware.
(o) Each preliminary prospectus publicly filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the Securities Act,
complied when so filed in all material respects with the Securities Act
and the applicable rules and regulations of the Commission thereunder.
(p) None of the USEC Companies is and, after giving effect to
the offering and sale of the Shares and the application of the proceeds
thereof as described in the Prospectus, none will be an "investment
company" as such term is defined in the Investment Company Act of 1940,
as amended.
(q) Except as described in the Prospectus, the USEC Companies
(i) are in compliance with any and all applicable federal, state and
local laws and regulations relating to the protection of human health
and safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("Environmental Laws"), (ii) have received
all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses
and (iii) are in compliance with all terms and conditions of any such
permit, license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or
other approvals or failure to comply with the terms and conditions of
such permits, licenses or approvals would not, singly or in the
aggregate, have a material adverse effect on USEC Federal or, after
giving effect to the Mergers, the Company or USEC Delaware.
(r) Except as described in the Prospectus, to the best of the
USEC Companies' knowledge, there are no costs or liabilities associated
with Environmental Laws (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval,
any related constraints on operating activities and any potential
liabilities to third parties) that would, after taking into account
existing indemnities from the United States Department of Energy and
after giving effect to the Privatization Legislation, have a material
adverse effect on USEC Federal or, after giving effect to the Mergers,
the Company or USEC Delaware.
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(s) Except as described in the Prospectus, no material labor
dispute with the employees of the USEC Companies or, to the knowledge
of USEC Federal, of Lockheed ▇▇▇▇▇▇ Utility Services, Inc. exists, or,
to the knowledge of the USEC Companies, is imminent that could have a
material adverse effect on USEC Federal or, after giving effect to the
Mergers, the Company or USEC Delaware.
(t) USEC Delaware, the Company and each other person or entity
that, together with USEC Delaware or the Company, is treated as a
single employer under Section 414 of the Internal Revenue Code of 1986,
as amended (the "Code") (each such person or entity being an "ERISA
Affiliate"), comply in all material respects with the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") if and to
the extent applicable. The USEC Companies and each ERISA Affiliate
comply in all material respects with the Code, if and to the extent
applicable, with respect to each pension plan (as defined in Section
3(2) of ERISA) maintained by any of the USEC Companies or such ERISA
Affiliate, and none of the USEC Companies or any of their respective
ERISA Affiliates has incurred any material liability to any pension
plan or to the Pension Benefit Guaranty Corporation that has not been
fully paid as of the date hereof.
(u) USEC Federal maintains, and after giving effect to the
Merger, the Company and USEC Delaware will maintain, a system of
internal accounting controls sufficient to provide reasonable
assurance that (l) transactions are executed in accordance with
management's general or specific authorizations; (2) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principals and to
maintain asset accountability; (3) access to assets is permitted only
in accordance with management's general or specific authorization; and
(4) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(v) The USEC Companies have complied with all provisions of
Section 517.075, Florida Statutes relating to doing business with the
Government of Cuba or with any person or affiliate located in Cuba.
2. AGREEMENTS TO SELL AND PURCHASE. The Selling Shareholder hereby
agrees to sell to the several Underwriters, and each Underwriter, upon the basis
of the
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representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from the
Selling Shareholder at $______ a share (the "Purchase Price") the number of USEC
Shares (subject to such adjustments to eliminate fractional shares as you may
determine) set forth in Schedules I and II hereto opposite the name of such
Underwriter.
On the basis of the representations and warranties contained
in this Agreement, and subject to its terms and conditions, the Company agrees
to sell to the U.S. Underwriters the Additional Shares, and the U.S.
Underwriters shall have a one-time right to purchase, severally and not jointly,
up to _______________ Additional Shares at the Purchase Price. If the U.S.
Representatives, on behalf of the U.S. Underwriters, elect to exercise such
option, the U.S. Representatives shall so notify the Company in writing not
later than 30 days after the date of this Agreement, which notice shall specify
the number of Additional Shares to be purchased by the U.S. Underwriters and the
date on which such shares are to be purchased. Such date may be the same as the
Closing Date (as defined below) but not earlier than the Closing Date nor later
than ten business days after the date of such notice. Additional Shares may be
purchased as provided in Section 4 hereof solely for the purpose of covering
over-allotments made in connection with the offering of the Company Shares. If
any Additional Shares are to be purchased, the Company agrees to sell the
Additional Shares and each U.S. Underwriter agrees, severa1ly and not jointly,
to purchase from the Company the number of Additional Shares (subject to such
adjustments to eliminate fractional shares as you may determine) that bears the
same proportion to the total number of Additional Shares to be purchased as the
number of U.S. USEC Shares set forth in Schedule I hereto opposite the name of
such U.S. Underwriter bears to the total number of U.S. USEC Shares.
The Company hereby agrees that, without the prior written
consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated on behalf of the Underwriters, it
will not, during the period ending 180 days after the date of the Prospectus,
(i) offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase, lend, or otherwise transfer or dispose of, directly or
indirectly, any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock or (ii) enter into any swap or
other agreement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Common Stock, whether any such
transaction described in clause (i) or (ii) above is to be settled by delivery
of Common Stock or such other securities, in cash or otherwise. The foregoing
sentence shall not apply to (a) the USEC Shares and Additional Shares to be sold
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hereunder or (b) any shares of Common Stock issued or options to purchase
Common Stock granted pursuant to employee or director benefit plans of the
Company if such plans are adopted by the Company after the Closing Date;
provided, that (I) the total number of shares of Common Stock issued or issuable
pursuant to options granted pursuant to this clause (b) shall not exceed 3% of
the total number of shares of Common Stock outstanding immediately following the
Offering, (II) any shares of Common Stock or options to purchase Common Stock
issued pursuant to this clause (b) shall be issued or granted, as the case may
be, at the then fair market value of the Common Stock and (III) the executive
officers or directors receiving any shares of Common Stock or options to
purchase Common Stock pursuant to this clause (b) shall have agreed in writing
to the lock-up provisions set forth in this paragraph.
3. TERMS OF PUBLIC OFFERING. The USEC Companies and the Selling
Shareholder are advised by you that the Underwriters propose to make a public
offering of their respective portions of the Shares as soon after the
Registration Statement and this Agreement have become effective as in your
judgment is advisable. The Company and the Selling Shareholder are further
advised by you that the Company Shares are to be offered to the public initially
at $____ a share (the "Public Offering Price") and to certain dealers selected
by you at a price that represents a concession not in excess of $_______ a share
under the Public Offering Price, and that any Underwriter may allow, and such
dealers may reallow, a concession, not in excess of $______ a share, to any
Underwriter or to certain other dealers.
4. PAYMENT AND DELIVERY. Payment for the USEC Shares shall be made to
the Selling Shareholder in immediately available funds in New York City against
delivery of such USEC Shares for the respective accounts of the several
Underwriters at 10:00 A.M., New York City time, on ____________, 1998, or at
such other time on the same or such other date, not later than_________, 1998,
as shall be designated in writing by you. The time and date of such payment are
hereinafter referred to as the "Closing Date."
Payment for any Additional Shares shall be made to the Company
in immediately available funds in New York City against delivery of such
Additional Shares for the respective accounts of the several U.S. Underwriters
at 10:00 A.M., New York City time, on the date specified in the notice described
in Section 2 or on such other date, in any event not later than _______, 1998,
as shall be designated in writing by the U.S. Representatives. The time and date
of such payment are herein after referred to as the "Option Closing Date."
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Certificates for the Company Shares, the USEC Shares and
Additional Shares shall be in definitive form and registered in such names and
in such denominations as you shall request in writing not later than one full
business day prior to the Closing Date, or the Option Closing Date, as the case
may be. The certificates evidencing the Company Shares, the USEC Shares and the
Additional Shares shall be delivered to you on the Closing Date or the Option
Closing Date, as the case may be, for the respective accounts of the several
Underwriters or the respective accounts of the several U.S. Underwriters, as the
case may be, with any transfer taxes payable in connection with the transfer of
the Company Shares, the USEC Shares and the Additional Shares to the
Underwriters duly paid, against payment of the Purchase Price therefor.
5. CONDITIONS TO THE UNDERWRITERS' OBLIGATIONS. The obligations of the
Selling Shareholder to sell the USEC Shares to the Underwriters and the several
obligations of the Underwriters to purchase and pay for the USEC Shares on the
Closing Date are subject to the condition that the Registration Statement shall
have become effective not later than 4:00 p.m. (New York City time) on the date
hereof.
The several obligations of the Underwriters are subject to the
following further conditions:
(a) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date, there shall not have occurred any
change, or any development involving a prospective change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the USEC Companies from that set forth in the Prospectus
(exclusive of any amendments or supplements thereto subsequent to the
date of this Agreement) that, in your reasonable judgment, is material
and adverse and that makes it, in your reasonable judgment,
impracticable to market the Shares on the terms and in the manner
contemplated in the Prospectus.
(b) The USEC Merger shall have been consummated and USEC
Delaware shall have succeeded to all of the assets and liabilities of
USEC Federal on the terms set forth in the USEC Merger Agreement and as
otherwise provided by federal law; and the Company Merger shall have
been consummated and a wholly-owned subsidiary of the Company shall
have succeeded to all of the assets and liabilities of USEC Delaware on
the terms set forth in the Company Merger Agreement.
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(c) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer
of each of the Company and USEC Delaware, to the effect that the
representations and warranties of the Company and USEC Delaware
contained in this Agreement are true and correct in all material
respects as of the Closing Date and that the USEC Companies have
complied in all material respects with all of the agreements and
satisfied all of the conditions on their part to be performed or
satisfied hereunder on or before the Closing Date (the officer(s)
signing and delivering such certificate may rely upon the best of his
or her knowledge as to proceedings threatened).
(d) The Underwriters shall have received on the Closing Date
an opinion of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, outside counsel
for the USEC Companies, dated the Closing Date, to the effect that:
(i) Each of USEC Delaware and the Company has been
duly incorporated, is validly existing as a corporation in
good standing under the laws of the state of Delaware, has
the corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is
duly qualified to transact business and is in good standing in
each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be
in good standing would not have a material adverse effect on
the Company or USEC Delaware;
(ii) this Agreement has been duly authorized,
executed and delivered by the USEC Companies;
(iii) the authorized capital stock of the Company
conforms in all material respects as to legal matters to the
description thereof contained in the Prospectus;
(iv) the USEC Shares and the Company Shares
outstanding prior to the issuance of the Additional Shares
have been duly authorized and are validly issued, fully paid
and non-assessable;
(v) the Additional Shares have been duly authorized
and, when issued and delivered in accordance with the terms of
this Agree-
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ment, will be validly issued, fully paid and non-assessable,
and the issuance of such Additional Shares will not be subject
to any preemptive or similar rights;
(vi) the execution and delivery by the USEC Companies
of, and the performance by each of them of their respective
obligations under this Agreement will not contravene any
provision of applicable law or the charters or by-laws of the
respective USEC Companies or, to the best of such counsel's
knowledge, any agreement or other instrument binding upon any
of the USEC Companies that is material to the USEC Companies,
or, to the best of such counsel's knowledge, any judgment,
order or decree of any governmental body, agency or court
having jurisdiction over the USEC Companies, and, except as
described in the Prospectus, no material consent, approval,
authorization or order of, or qualification with, any
governmental body or agency is required for the performance by
the USEC Companies of their obligations under this Agreement
and the Merger Agreements, except such as may be required by
the securities or Blue Sky laws of the various states in
connection with the offer and sale of the Shares or which are
not required to be obtained, made or taken prior to the date
hereof;
(vii) USEC Federal and USEC Delaware had all
corporate power and authority to execute, deliver and perform
the USEC Merger Agreement and took all action required by law,
their respective charters and by-laws to approve the merger
of USEC Federal with and into USEC Delaware; USEC Delaware and
the Company had all corporate power and authority to execute,
deliver and perform the Company Merger Agreement and took all
action required by law and their respective charters and
by-laws to approve the merger of USEC Delaware with and into a
subsidiary of the Company;
(viii) the execution and delivery of the USEC Merger
Agreement and the consummation of the USEC Merger did not
contravene any provision of applicable law or USEC Federal's
or USEC Delaware's charter or by-laws, or, to the best of
such counsel's knowledge, any agreement or other instrument
binding upon USEC Federal or USEC Delaware that is material to
USEC Federal or USEC Delaware, or, to the best of such
counsel's knowledge, any judgment, order or
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decree of any governmental body, agency or court having
jurisdiction over USEC Federal or USEC Delaware, and no
consent, approval, authorization or order of, or qualification
with, any governmental body or agency was required for the
performance by USEC Federal and USEC Delaware of their
respective obligations under the USEC Merger Agreement;
(ix) the execution and delivery of the Company Merger
Agreement and the consummation of the Company Merger did not
contravene any provision of applicable law or the Company's or
USEC Delaware's charter or by-laws, or, to the best of such
counsel's knowledge, any agreement or other instrument binding
upon the Company or USEC Delaware that is material to the
Company or USEC Delaware, or, to the best of such counsel's
knowledge, any judgment, order or decree of any governmental
body, agency or court having jurisdiction over the Company or
USEC Delaware, and no consent, approval, authorization or
order of, or qualification with, any governmental body or
agency was required for the performance by the Company and
USEC Delaware of their respective obligations under the
Company Merger Agreement;
(x) the USEC Merger Agreement is a valid and binding
agreement of USEC Delaware and, subject to the Privatization
Legislation, USEC Federal, and the USEC Merger has been duly
consummated in accordance with the terms of the USEC Merger
Agreement;
(xi) the Company Merger Agreement is a valid and
binding agreement of the Company and USEC Delaware, and the
Company Merger has been duly consummated in accordance with
the terms of the Company Merger Agreement;
(xii) the statements (A) in the Prospectus under the
captions, "Description of Capital Stock" and "Certain United
States Federal Tax Consequences to Non-U.S. Stockholders" and
(B) in the Registration Statement in Items 14 and 15, in each
case insofar as such statements constitute summaries of the
legal matters, documents or proceedings referred to therein,
fairly present the information called for with respect to such
legal matters, documents and proceedings and fairly summarize
the matters referred to therein;
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(xiii) none of the USEC Companies is and, after
giving effect to the offering and sale of the Shares and the
application of the proceeds thereof as described in the
Prospectus, none will be an "investment company" as such term
is defined in the Investment Company Act of 1940, as amended;
(xiv) Each of the Registration Statement, as of the
Effective Date, and the Prospectus, as of its date, appeared
on its face to have been appropriately responsive in all
material respects to the requirements of the Securities Act
and the applicable rules and regulations of the Commission
thereunder, except that such counsel does not: (i) express any
opinion as to the financial statements and related notes,
schedules and other financial and statistical data included in
or excluded from the Registration Statement or the Prospectus
or (ii) except as set forth in clause (xii) above, assume any
responsibility for the accuracy, completeness or fairness of
the statements contained in the Registration Statement and the
Prospectus;
(xv) [Opinion re: patents/copyrights -- To Come]
(xvi) no facts have come to such counsel's attention
that have caused such counsel to believe that the Registration
Statement, at the time it became effective, contained any
untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to
make the statements contained therein not misleading or that
the Prospectus, as of its date and as of the date of the
opinion, contained or contains any untrue statement of a
material fact or omitted or omits to state a material fact
necessary in order to make the statements contained therein,
in the light of the circumstances under which they were made,
not misleading, except that such counsel expresses no opinion
or belief with respect to the financial statements and related
notes, schedules and other financial and statistical data
included in or excluded from the Registration Statement or the
Prospectus, or the exhibits to the Registration Statement.
(e) The Underwriters shall have received on the Closing Date
an opinion of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq., Vice President and General Counsel
of the Company, dated the Closing Date, to the effect that:
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(i) such counsel does not know of any legal or
governmental proceedings pending or threatened to which any of
the USEC Companies is a party or to which any of the
properties of any of the USEC Companies is subject that are
required to be described in the Registration Statement or the
Prospectus and are not so described or of any statutes,
regulations, contracts or other documents that are required to
be described in the Registration Statement or the Prospectus
or to be filed as exhibits to the Registration Statement that
are not described or filed as required;
(ii) except as described in the Prospectus, no
material labor dispute with the employees of the USEC
Companies or, to the knowledge of such counsel, of Lockheed
▇▇▇▇▇▇ Utility Services, Inc. exists, or, to such counsel's
knowledge, is imminent that could have a material adverse
effect on the USEC Companies;
(iii) to such counsel's knowledge, USEC Federal has
complied in all material respects with all of its duties and
obligations under the Privatization Legislation required to be
performed or complied with at the date hereof insofar as such
duties relate to the transactions contemplated by this
Agreement; except as described in the Prospectus, the Company
has, to such counsel's knowledge, all necessary consents,
authorizations, approvals, clearances, orders, certificates
and permits of and from, and has made all declarations and
filings with, all federal, state, local and other governmental
authorities (including, without limitation, the Nuclear
Regulatory Commission and the Occupational Safety and Health
Administration), all self-regulatory organizations and all
courts and other tribunals, to own, lease, license and use its
properties and assets and to conduct its business in the
manner described in the Prospectus, except to the extent that
the failure to obtain or file would not have a material
adverse effect on the Company; and
(iv) except as described in the Prospectus, to such
counsel's knowledge, the Company (A) is in compliance with any
and all applicable Environmental Laws, (B) has received all
permits, consents, authorizations, clearances, orders,
certificates, licenses or other approvals required of it under
applicable Environmental Laws to
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conduct its business and (C) is in compliance with all terms
and conditions of any such permit, consent, authorization,
clearance, order, certificate, license or approval, except
where such noncompliance with Environmental Laws, failure to
receive required permits, consents, authorizations,
clearances, orders, certificates, licenses or other approvals
or failure to comply with the terms and conditions of such
permits, certificates, licenses or approvals would not, singly
or in the aggregate, have a material adverse effect on the
Company.
(f) The Underwriters shall have received on the Closing Date
an opinion of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Underwriters,
dated the Closing Date, covering the matters referred to in
subparagraphs (ii), (xii) (but only as to the statements in the
Prospectus under "Description of Capital Stock" and "Underwriters"),
(xiv), and (xvi) of paragraph (d) above.
The opinions of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq. described in paragraphs (d) and (e) above shall be
rendered to the Underwriters at the request of the Company or the Selling
Shareholder, as the case may be, and shall so state therein.
(g) The Underwriters shall have received on the Closing Date
evidence that (i) the person executing and delivering the Underwriting
Agreement on behalf of the Selling Shareholder has been delegated the
authority of the Secretary of the Treasury (the "Secretary") under the
Privatization Legislation to exercise any right or power, make any
finding or determination, or perform any duty or obligation which the
Secretary is authorized to exercise, make or perform under the
Privatization Legislation relating to the privatization of USEC
Federal; and (ii) such person has given the approvals and made the
determination required of the Secretary under sections 3103 and 3104 of
the USEC Privatization Act (42 U.S.C. Sections 2297h-1,
2297h-2).
(h) The Underwriters shall have received, on each of the date
hereof and the Closing Date, a letter dated the date hereof or the
Closing Date, as the case may be, in form and substance satisfactory to
the Underwriters, from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, independent public
accountants, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial
information contained in the Registration Statement and the
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Prospectus; provided that the letter delivered on the Closing Date
shall use a "cut-off date" not earlier than the date hereof.
(i) The Shares shall have been approved for inclusion on the
New York Stock Exchange.
The several obligations of the U.S. Underwriters to purchase
Additional Shares hereunder are subject to the delivery to the U.S.
Underwriters on the Option Closing Date of such documents as the U.S.
Representatives may reasonably request with respect to the good standing of the
Company, the due authorization and issuance of the Additional Shares and other
matters related to the issuance of the Additional Shares.
6. COVENANTS OF THE COMPANY. In further consideration of the agreements
of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(a) To furnish to you, without charge, eight signed copies of
the Registration Statement (including exhibits thereto) and for
delivery to each other Underwriter a conformed copy of the Registration
Statement (without exhibits thereto) and to furnish to you in New York
City, without charge, prior to 5:00 p.m. New York City time on the
business day following the date of this Agreement and during the period
mentioned in paragraph (c) below, as many copies of the Prospectus and
any supplements and amendments thereto or to the Registration Statement
as you may reasonably request.
(b) Before amending or supplementing the Registration
Statement or the Prospectus, to furnish to you a copy of each such
proposed amendment or supplement and not to file any such proposed
amendment or supplement to which you reasonably object in a timely
manner, and to file with the Commission within the applicable period
specified in Rule 424(b) under the Securities Act any prospectus
required to be filed pursuant to such Rule.
(c) If, during such period after the first date of the public
offering of the Shares as in the opinion of counsel for the
Underwriters the Prospectus is required by law to be delivered in
connection with sales by an Underwriter or dealer, any event shall
occur or condition exist as a result of which it is necessary to amend
or supplement the Prospectus in order to make the statements therein,
in the light of the circumstances when the Prospectus is
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21
delivered to a purchaser, not misleading, or if, in the opinion of
counsel for the Underwriters, it is necessary to amend or supplement
the Prospectus to comply with applicable law, forthwith to prepare,
file with the Commission and furnish, at its own expense, to the
Underwriters and to the dealers (whose names and addresses you will
furnish to the Company) to which Shares may have been sold by you on
behalf of the Underwriters and to any other dealers upon request,
either amendments or supplements to the Prospectus so that the
statements in the Prospectus as so amended or supplemented will not, in
the light of the circumstances when the Prospectus is delivered to a
purchaser, be misleading or so that the Prospectus, as amended or
supplemented, will comply with law. The expense of complying with this
Section 6(c) shall be borne by the Company in respect of any amendment
or supplement required during the nine-month period after effectiveness
of the Registration Statement and by the Underwriters thereafter.
(d) To endeavor to qualify the Shares for offer and sale under
the securities or Blue Sky laws of such jurisdictions as you shall
reasonably request.
(e) To make generally available to the Company's security
holders and to you as soon as practicable an earning statement covering
the twelve-month period ending ___________, 1999 that satisfies the
provisions of Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder.
7. FOREIGN OWNERSHIP CERTIFICATE.
(a) In further consideration of the agreements of the USEC
Companies and the Selling Shareholder herein contained, each
Underwriter represents to the USEC Companies and the Selling
Shareholder that the Underwriter has complied in all material respects
with the certificate of compliance regarding foreign ownership
restrictions (the "Foreign Ownership Certificate") and is delivering
simultaneously herewith an executed Foreign Ownership Certificate in
the form of Exhibit A hereto.
(b) The Underwriters acknowledge that the Board of Directors
of USEC Federal is relying on the Foreign Ownership Certificate in
making certain determinations under the Privatization Legislation.
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(c) In the event the over-allotment option is exercised by the
U.S. Underwriters, the U.S. Underwriters shall affirm in writing that
the U.S. Underwriters followed the procedures set forth in the Foreign
Ownership Certificate. with respect to the Additional Shares being sold
by the Company.
8. EXPENSES. Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, all expenses incident
to the performance of the USEC Companies' and the Selling Shareholder's
obligations under this Agreement will be paid or caused to be paid out of USEC
Federal's revenue account with the U.S. Department of Treasury, including: (i)
the fees, disbursements and expenses of the counsel for the USEC Companies, and
the USEC Companies' accountants in connection with the registration and delivery
of the Shares under the Securities Act and all other fees or expenses in
connection with the preparation and filing of the Registration Statement, any
preliminary prospectus, the Prospectus and amendments and supplements to any of
the foregoing, including all printing costs associated therewith, and the
mailing and delivering of copies thereof to the Underwriters and dealers, in the
quantities hereinabove specified, (ii) all costs and expenses related to the
transfer and delivery of the Shares to the Underwriters, including any transfer
or other taxes payable thereon, (iii) the cost of printing or producing any Blue
Sky memorandum in connection with the offer and sale of the Shares under state
securities laws and all expenses in connection with the qualification of the
Shares for offer and sale under state securities laws as provided in Section
6(d) hereof, including filing fees and the reasonable fees and disbursements of
counsel for the Underwriters in connection with such qualification and in
connection with the Blue Sky memorandum, which are not expected to exceed
$10,000, (iv) all filing fees incurred in connection with the review and
qualification of the offering by the National Association of Securities Dealers,
Inc., which are not expected to exceed $30,500, (v) all fees and expenses in
connection with the preparation and filing of the registration statement on Form
8-A relating to the Common Stock and all costs and expenses incident to listing
the Shares on the New York Stock Exchange, (vi) the cost of printing
certificates representing the Shares, (vii) the costs and charges of any
transfer agent, registrar or depositary, (viii) the costs and expenses of the
USEC Companies relating to investor presentations on any "road show" undertaken
in connection with the marketing of the offering of the Shares, including,
without limitation, expenses of the USEC Companies associated with the
production of road show slides and graphics, fees and expenses of any
consultants engaged by the USEC Companies in connection with the road show
presentations, and travel and lodging expenses of the representatives and
officers of the USEC Companies and any such consultants, and (ix) all other
costs and expenses incident to
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the performance of the obligations of the USEC Companies and the Selling
Shareholder hereunder for which provision is not otherwise made in this
Section. It is understood, however, that except as provided in this Section,
Section 9 entitled "Indemnity and Contribution", and the last paragraph of
Section 11 below, the Underwriters will pay all of their costs and expenses,
including fees and disbursements of their counsel, stock transfer taxes payable
on resale of any of the Shares by them and any advertising expenses connected
with any offers they may make.
9. INDEMNITY AND CONTRIBUTION. (a) From and after the Closing Date, the
Company agrees to indemnify and hold harmless each Underwriter and each person,
if any, who controls any Underwriter within the meaning of either Section 15 of
the Securities Act or Section 20 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating any
such action or claim) caused by any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement or any amendment
thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information relating to any Underwriter
furnished to the USEC Companies in writing by such Underwriter through you
expressly for use therein; provided, however, that the foregoing indemnity
agreement with respect to any preliminary prospectus shall not inure to the
benefit of any Underwriter from whom the person asserting any such losses,
claims, damages or liabilities purchased Shares, or any person controlling such
Underwriter, if a copy of the Prospectus (as then amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) was not sent
or given by or on behalf of such Underwriter to such person, if required by law
so to have been delivered, at or prior to the written confirmation of the sale
of the Shares to such person, and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such loss, claim,
damage or liability unless such failure is the result of non-compliance by the
Company with Section 6(a) hereof.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, the directors of the Company
(including persons identified to become directors), the officers of
the Company who
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sign the Registration Statement and each person, if any, who controls
the Company within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act from and against any and all
losses, claims, damages and liabilities (including, without limitation,
any legal or other expenses reasonably incurred in connection with
defending or investigating any such action or claim) caused by any
untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or any amendment thereof, any
preliminary prospectus or the Prospectus (as amended or supplemented if
the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, but only with reference to
information relating to such Underwriter furnished to the USEC
Companies in writing by such Underwriter through you expressly for use
in the Registration Statement, any preliminary prospectus, the
Prospectus or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of
which indemnity may be sought pursuant to paragraph (a) or (b) of this
Section 9, such person (the "indemnified party") shall promptly notify
the person against whom such indemnity may be sought (the "indemnifying
party") in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party in such proceeding
and shall pay the fees and disbursements of such counsel related to
such proceeding. In any such proceeding, any indemnified party shall
have the right to retain its own counsel, but the fees and expenses of
such counsel shall be at the expense of such indemnified party unless
(i) the indemnifying party and the indemnified party shall have
mutually agreed to the retention of such counsel or (ii) the named
parties to any such proceeding (including any impleaded parties)
include both the indemnifying party and the indemnified party and
representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between
them. It is understood that the indemnifying party shall not, in
respect of the legal expenses of any indemnified party in connection
with any proceeding or related proceedings in the same jurisdiction, be
liable for (i) the fees and expenses of more than one separate firm (in
addition to any local counsel) for all Underwriters and all persons, if
any, who control any Underwriter within the meaning of either Section
15 of the Securities Act
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or Section 20 of the Exchange Act and (ii) the fees and expenses of
more than one separate firm (in addition to any local counsel) for the
Company, its directors, its officers who sign the Registration
Statement and each person, if any, who controls the Company within the
meaning of either such Section, and that all such fees and expenses
shall be reimbursed as they are incurred. In the case of any such
separate firm for the Underwriters and such control persons of
Underwriters, such firm shall be designated in writing by ▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Co. Incorporated. In the case of any such separate firm for
the Company, and such directors, officers and control persons of the
Company, such firm shall be designated in writing by the Company. The
indemnifying party shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with
such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and
against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by
the second and third sentences of this paragraph, the indemnifying
party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement
is entered into more than 30 days after receipt by such indemnifying
party of the aforesaid request and (ii) such indemnifying party shall
not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement. No indemnifying party
shall, without the prior written consent of the indemnified party,
effect any settlement of any pending or threatened proceeding in
respect of which any indemnified party is or could have been a party
and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject
matter of such proceeding.
(d) To the extent the indemnification provided for in
paragraph (a) or (b) of this Section 9 is unavailable to an indemnified
party or insufficient in respect of any losses, claims, damages or
liabilities referred to therein, then each indemnifying party under
such paragraph, in lieu of indemnifying such indemnified party
thereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the indemnifying party or parties on the
one hand and the
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indemnified party or parties on the other hand from the offering of the
Shares or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above
but also the relative fault of the indemnifying party or parties on the
one hand and of the indemnified party or parties on the other hand in
connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative benefits received by the Company
on the one hand and the Underwriters on the other hand in connection
with the offering of the Shares shall be deemed to be in the same
respective proportions as the net proceeds from the offering of the
Shares (before deducting expenses) received by the Company and the
total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover of
the Prospectus, bear to the aggregate Public Offering Price of the
Shares. The relative fault of the Company on the one hand and the
Underwriters on the other hand shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material
fact relates to information supplied by the Company or by the
Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The Underwriters' respective obligations to contribute
pursuant to this Section 9 are several in proportion to the respective
number of USEC Shares and Additional Shares they have purchased
hereunder, and not joint.
(e) The Company and the Underwriters agree that it would not
be just or equitable if contribution pursuant to this Section 9 were
determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations
referred to in paragraph (d) of this Section 9. The amount paid or
payable by an indemnified party as a result of the losses, claims,
damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of this Section 9,
no Underwriter shall be required to contribute any amount in excess of
the amount by which the total price at which the Shares underwritten by
it and distributed to the public were offered to the public exceeds the
amount of any damages that such Under-
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writer has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The
remedies provided for in this Section 9 are not exclusive and shall not
limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in
this Section 9 and the representations, warranties and other statements
of the USEC Companies contained in this Agreement shall remain
operative and in full force and effect regardless of (i) termination of
this Agreement, (ii) any investigation made by or on behalf of any
Underwriter or any person controlling any Underwriter, the Selling
Shareholder, or the Company, USEC Delaware, their officers or directors
or any person controlling the Company or USEC Delaware and (iii)
acceptance of and payment for any of the Shares; provided, however,
that the Underwriters agree, that no indemnification shall be provided
by the United States (including USEC Federal so long as it is an agency
and instrumentality thereof).
10. TERMINATION. This Agreement shall be subject to termination by
notice given by you to the USEC Companies and the Selling Shareholder, if (a)
after the execution and delivery of this Agreement and prior to the Closing Date
(i) trading generally shall have been suspended or materially limited on or by,
as the case may be, any of the New York Stock Exchange, the American Stock
Exchange, the National Association of Securities Dealers, Inc., the Chicago
Board of Options Exchange, the Chicago Mercantile Exchange or the Chicago Board
of Trade, (ii) trading of any securities of the Company shall have been
suspended on any exchange or in any over-the-counter market, (iii) a general
moratorium on commercial banking activities in New York shall have been declared
by either Federal or New York State authorities or (iv) there shall have
occurred any outbreak or escalation of hostilities or any change in financial
markets or any calamity or crisis that, in your judgment, is material and
adverse and (b) in the case of any of the events specified in clauses (a)(i)
through (iv), such event, singly or together with any other such event, makes
it, in your judgment, impracticable to market the Shares on the terms and in the
manner contemplated in the Prospectus.
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11. EFFECTIVENESS; DEFAULTING UNDERWRITERS. This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto. If, on
the Closing Date or the Option Closing Date, as the case may be, any one or more
of the Underwriters shall fail or refuse to purchase USEC Shares or Additional
Shares that it has or they have agreed to purchase hereunder on such date, and
the aggregate number of USEC Shares or Additional Shares which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is not more
than one-tenth of the aggregate number of the USEC Shares or Additional Shares
to be purchased on such date, the other Underwriters shall be obligated
severally in the proportions that the number of USEC Shares set forth opposite
their respective names in Schedule I or Schedule II bears to the aggregate
number of USEC Shares set forth opposite the names of all such non-defaulting
Underwriters, or in such other proportions as you may specify, to purchase the
USEC Shares or Additional Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date; provided
that in no event shall the number of USEC Shares or Additional Shares that any
Underwriter has agreed to purchase pursuant to this Agreement be increased
pursuant to this Section 11 by an amount in excess of one-ninth of such number
of USEC Shares or Additional Shares without the written consent of such
Underwriter. If, on the Closing Date, any Underwriter or Underwriters shall fail
or refuse to purchase USEC Shares and the aggregate number of USEC Shares with
respect to which such default occurs is more than one-tenth of the aggregate
number of USEC Shares to be purchased by all of the Underwriters, and
arrangements satisfactory to you, the Company and the Selling Shareholder for
the purchase of such USEC Shares are not made within 36 hours after such
default, this Agreement shall terminate without liability on the part of any
non-defaulting Underwriter, the Company or the Selling Shareholder. In any such
case either you or the Selling Shareholder shall have the right to postpone the
Closing Date, but in no event for longer than seven days, in order that the
required changes, if any, in the Registration Statement and in the Prospectus or
in any other documents or arrangements may be effected. If, on the Option
Closing Date, any U.S. Underwriter or U.S. Underwriters shall fail or refuse to
purchase Additional Shares and the aggregate number of Additional Shares with
respect to which such default occurs is more than one-tenth of the aggregate
number of Additional Shares to be purchased by all of the Underwriters, the
non-defaulting U.S. Underwriters shall have the option to (i) terminate their
obligation hereunder to purchase Additional Shares or (ii) purchase not less
than the number of Additional Shares that such non-defaulting U.S. Underwriters
would have been obligated to purchase in the absence of such default. Any action
taken under this paragraph shall not relieve any defaulting Underwriter from
liability in respect of any default of such Underwriter under this Agreement.
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12. COUNTERPARTS. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument.
13. APPLICABLE LAW. This Agreement, and the rights and obligations of
the parties hereunder, shall be governed by, and construed and interpreted in
accordance with the State of New York, without giving effect to the provisions
thereof relating to conflicts of law; provided, however, that the rights and
obligations of the U.S. Government hereunder shall be governed by, and construed
and interpreted in accordance with, Federal law.
14. HEADINGS. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
Very truly yours,
USEC INC., a Delaware corporation
By
Name:
Title:
UNITED STATES ENRICHMENT
CORPORATION, a Delaware corporation
By
Name:
Title:
UNITED STATES ENRICHMENT
CORPORATION, a federally-
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chartered entity
By
Name:
Title:
THE UNITED STATES OF AMERICA, acting
through the Secretary of Treasury,
through his duly authorized designee
By
Name:
Title:
Accepted as of the date hereof
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ &
▇▇▇▇▇ Incorporated
▇.▇. ▇▇▇▇ & Company
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc.
▇▇▇▇▇▇ Brothers Inc.
Prudential Securities Incorporated
▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
Acting severally on behalf of themselves and
the several U.S. Underwriters named in
Schedule I hereto.
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By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
By_____________________
Name:
Title:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International Limited
▇▇▇▇▇▇▇ ▇▇▇▇▇ International
▇.▇. ▇▇▇▇ & Company
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc.
▇▇▇▇▇▇ Brothers Inc.
Prudential Securities Incorporated
▇▇▇▇▇ ▇▇▇▇▇▇ Inc
Acting severally on behalf of themselves
and the several International Underwriters
named in Schedule II hereto.
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International Limited
By_______________________
Name:
Title:
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SCHEDULE I
U.S. Underwriters
Number of USEC
Shares
Underwriter To Be Purchased
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇.▇. ▇▇▇▇ & Company
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc.
▇▇▇▇▇▇ Brothers Inc.
Prudential Securities Incorporated
▇▇▇▇▇ ▇▇▇▇▇▇ Inc
NAMES OF OTHER U.S. UNDERWRITERS
-------------
Total U.S. USEC Shares . . . . . . . . . .
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